I n the context of the likely accession of China to the World Trade Organization (WTO), it is useful to gauge the protection or taxation affecting the production of China’s major agricultural crops and to assess the competitiveness of these crops. Because Chinese agriculture differs by regions, we consider early indica rice, late indica rice, and japonica rice grown in different parts of China, south wheat, north wheat, south corn, north corn, sorghum, soybeans, rapeseed, cotton, tobacco, sugarcane, and a subset of fruits and vegetables. We use 1996 to 1998 data, which are the most recent available data.

"FAPRI (the Food and Agricultural Policy Research Institute) is one of only a few organizations around the globe that focuses on providing model-based economic policy analysis for the agricultural sector,” says Frank Fuller, the technical director for FAPRI models. “It remains free from political pressures that can influence and censor outcomes of policy analysis. Consequently, FAPRI is well regarded for its contribution to domestic and trade policy debates,” he says. FAPRI is part of the Trade and Agricultural Policy Division at the Center for Agricultural and Rural Development (CARD).

Next year the new Congress will again debate what to do about farm policy. Farm-state representatives and senators will offer various proposals to remedy the ills of agriculture. In turn, farm organizations, environmental groups, and other concerned parties will try to determine how the various proposals best serve their own interests. There is, however, a recurring, fundamental question that has yet to be addressed satisfactorily: What do we actually want farm policy to do? Some would argue for payments to maintain rural vitality. Others propose programs that would link farm income support with enhanced environmental stewardship. And still others suggest maintaining a minimum level of farm income through counter-cyclical payments

Whether an individual or nation can compete in the global marketplace hinges on the ability not only to produce materials and goods demanded by customers but also to deliver those materials and goods in an efficient, timely, and safe manner. The transportation and logistics systems that serve a market are critical given that transportation costs typically represent more than one-half of a commodity’s total landed cost. The agricultural sector of the United States enjoys considerable advantages in grain movement and storage, helping to explain the overall trade advantage of the United States over Argentina in common export markets. It is estimated that higher freight rates and inadequate transportation capacity result in a 10 to 20 percent increase in the cost of South American exports relative to the United States. It appears, however, that cost and performance differences are narrowing between the United States and Argentina. Argentina’s rapid progress promises to diminish the advantage the United States has.